ICAC puts councils on notice over dodgy procurement practices with maintenance contracts

Dodgy practices by councils have prompted a warning from ICAC to clean up their act after a manager was nearly prosecuted

Local government has been told to improve its procurement procedures to reduce the risk of corruption in councils.

Independent Commissioner against Corruption Ann Vanstone has issued a report detailing problems exposed within councils by several anti-corruption investigations.

Ms Vanstone said the ICAC investigations had found “improper conduct by public officers and suppliers, and failures in practices, policies and procedures” were at the core of the corruption risks within facilities management by councils.

Ms Vanstone said her report was prepared following a recent ICAC investigation into the conduct of one council manager that almost resulted in prosecution.

“The investigation involved allegations the public officer improperly used his position to award council maintenance contracts to individuals and businesses with whom he had longstanding connections,” she said.

“Those connections were not disclosed to the council.”

Ms Vanstone said the ICAC investigation uncovered a “pattern of improper conduct” by the council employee.

“However, poor record keeping and a lack of admissible evidence meant it was doubtful a charge of corruption would be sustained,” she said.

Ms Vanstone said it was not the first time ICAC had seen conduct “of this type in the awarding of facilities maintenance contracts in councils”.

ICAC Commissioner Ann Vanstone has issued a warning about potential corruption risks in councils. Picture: Tony Lewis

Other investigations had found council officers had:

SOUGHT inducements as rewards for awarding contracts;

PROVIDED confidential information to suppliers about upcoming contracts;

OBTAINED quotes from unqualified suppliers to favour other suppliers;

AWARDED contracts to companies in which they had a financial interest;

PROVIDED tight timelines to competitors to submit quotes to favour businesses they were involved with;

WROTE submissions for companies bidding for work;

MANIPULATED quotes to ensure work was shared among companies which they were personally involved with.

Ms Vanstone said while there was improper conduct by some council staff, suppliers also were colluding to set prices for maintenance work, seeking confidential information from councils, overcharging, under delivering against agreed requirements and standard of work and undertaking unnecessary inspection, testing, cleaning and maintenance of council facilities.

Councils, on the other hand, were failing to ensure their procurement procedures were consistent and there was correct use of purchase orders.

There also was:

POOR procurement induction and training;

INADEQUATE control over access to confidential tender and contract documents;

FAILURE to update equipment and registers of facilities;

LACK of checking to ensure work had been completed to standard;

AWARDING work to unqualified or unlicensed contractors;

GIVING contracts to council staff and their relatives or in other circumstances where there were conflicts of interest.

Ms Vanstone said all of the various ICAC investigations into the procurement practices of councils had “revealed undisclosed conflicts of interest”.

“Conflicts of interest are a persistent integrity risk,” she said.

“However, in facilities management that risk is more complex than in other business areas, and requires more attention from councils.”

Ms Vanstone said she hoped her report would help reduce the risk of corruption within councils.

Comment has been sought from the Local Government Association.

Originally published as ICAC puts councils on notice over dodgy procurement practices with maintenance contracts